The business and culture of our digital lives, from the L.A. Times

Sony's U.S. employees bracing for restructuring announcement from Tokyo headquarters

January 20, 2009 | 5:58
pm

On the heels of a brutal price war that left many consumer electronics companies reeling this holiday season, Sony may announce a global restructuring plan within the next several days.

The Financial Times reported today that Sony could announce the moves Wednesday or Thursday but that its top managers were fighting over whether to shed more jobs. The last time Sony announced cutbacks, on Dec. 9, only a few hundred U.S. jobs were estimated to be lost out of the 8,000 being eliminated worldwide. The Tokyo electronics and media giant employed 160,000 workers globally as of Sept. 30.

Sony's U.S. employees are bracing for another possible announcement of job cuts, according to one executive, but it's unclear how the American operations would be affected. The company's many U.S. offices include Sony Pictures Entertainment in Los Angeles; Sony Online Entertainment and Sony Electronics in San Diego; and Sony Computer Entertainment in Foster City, Calif.

Sony isn't the only consumer electronics company hurting. Samsung Electronics, the largest seller of flat-panel televisions in the U.S., last week said it would consolidate several major divisions, and it's expected to post a fourth-quarter loss. The South Korean company is reporting earnings Friday.

Exacerbating the troubles at Sony and Samsung is the weakening dollar, which has the effect of making imported electronics more expensive in the U.S. Profits were also scarce as retailers slashed prices this holiday in an attempt to lure buyers. The liquidation of Circuit City will also have an effect on electronics companies and other suppliers that are owed money by the failed retailer, said Richard Doherty, an analyst with Envisioneering Group, a technology consulting firm.